Whatever it is, it's better in the wind…

Harley-Davidson: What Happened

It could be the title of Harley-Davidson CEO, Matt Levatich’s memoir on his failed 2017 year while in charge of the Motor Company.

I happen to be riding with the HOG Lewis and Clark Expedition last week when Harley-Davidson announced their disappointing Q2’17 financial results and late to weigh in:

* Harley-Davidson net income dropped 7.7%. Sales in the U.S. were down 9.3% and 6.7% worldwide.

* Harley-Davidson now expects to ship 241,000 to 246,000 motorcycles to dealers worldwide in 2017, which is down approximately 6% to 8% from 2016.

* Harley-Davidson expects to ship 39,000 to 44,000 motorcycles in Q3’17, which is down approximately 10% to 20% from 2016.

* Approx 180 U.S. based manufacturing jobs will be cut in Menomonee Falls and Kansas City. This in addition to the 118 workers who were axed back in April this year at the York plant as some positions were being shifted to Kansas City.

For those keeping track, this is a continuation of a three-year slide by the motor company. However, during the call Mr. Levatich described what can only be called an “alternative reality” in hopes (I assume?) to reassure the financial markets and stated “we are going to build bikers first, add 2 million new Harley-Davidson riders and launch 100 brand new models during the next 10 years while growing the international business by 50%.”

Huh?

I’m being a bit snarky here, but his statement appears either woefully naïve to the point of negligence or a continuance of marketing spin. Proclaiming an unprecedented future result of this magnitude smells like stunningly wishful thinking at best or at worst plain lying. For reasons I can’t explain, why would Mr. Levatich climb up on a high-wire without a net given such an overly-optimistic prediction? Even with nearly 8-million Americans that are “sleeping license holders,” — those who have motorcycle riding credentials, but don’t own a bike — it doesn’t pencil and seems unobtainable.

I don’t know if the boardroom folks in Milwaukee read the NW Harley Blog on a regular basis and/or hang on its every word. But, we know the motor company has been continuously producing motorcycles for more than a century, yet seemingly everyone on the internet with a keyboard thinks they can do it better.

And it’s a well-established fact that internet bloggers and commenters are geniuses. They definitely know how to run a business better than a company that has been constantly producing motorcycles through two world wars, the Great Depression, and roughly 20 U.S. recessions.

Sure the motor company needs our help and I’ve got some feedback and plenty of comments. But, until the motor company calls me asking for it, I’ll look for Mr. Levatich’s memoir, which will certainly be “a deeply intimate account and a cautionary tale on the world’s most iconic motorcycle brand.

One Response

I’ve desperately been trying to find someone who can explain to me what I perceive as a change in core beliefs by the motor company. I haven’t really found it, but I will leave a comment here.

A realization came to me at a dealer sponsored ride that I had the oldest bike in a group of 20. I have a 2003 Ultra Classic which I don’t think of as old. It’s in terrific shape and I want to keep riding it.

I always thought that the philosophy behind a bike like my Ultra Classic was to provide the Golden Age of motorcycling, in a modern-enough package today. To me this meant a motorcycle that had the classic visual look and sound of a 50’s motorcycle. Harley seemed to do all it could do to provide this.

And then something happened. Something changed. The words Ultra Classic disappeared from the front fender, along with the front bumper. The perfectly proportioned 5 gallon tank was replaced by a puffed-up 6 gallon one. The classic lollipop , turn signals now replaced by ones that look like they were designed by Kuryakyn. Then they replaced the traditional instruments with an automotive cockpit and that totally inappropriate infotainment system with its hideous glass screen. In the back, the trunk is more streamlined and has non-classic LED lights. The chrome accents down the rear fender gone and covered by panels that look like an afterthought. The rear bumper is gone too.

The bike has less visual detail, and now they’ve counterbalanced the engine so that it’s less offensive to newcomers. Sure, it’s more powerful, but I was fine with the power of my 88CI engine.

But the greatest insult is Harley’s dropping of replacement part support for bikes over 10 years old. They are changing the bikes so often that the parts are specific to a very narrow range of years, thwarting the aftermarket too. The dealers are turning away owners of older bikes because they can’t support them.

Here’s the thing, Harley expects you to BUY this bike for anywhere from 26 to 42 thousand dollars (bikes aren’t leased) and then won’t talk to you after 10 years of taking your money for parts and service during that time.